Legal Question in Real Estate Law in California

Re: Foreclosure questions in California

I don't know of any requirement that a lender provide statements, tender bills, or give notice of missed or insufficient payments. Nearly all commercial lenders will do all of the above, but I suspect that many private lenders are not set up to generate this kind of paperwork and don't consider it their responsibility to do so.

When you say the lender has "filed a foreclosure," I assume you mean they prepared, recorded and served (by certified mail) a Notice of Default. Only a lawyer could advise you whether this was done completely properly, or whether it was premature or improperly carried out. However, if the lender has s claim, with some possible validity to it, that you are 60 days behind, you should treat it seriously.

I suspect this dispute originates with a hazard insurance problem. My guess is that the lender believes you have allowed the insurance to lapse, or it was cancelled for some reason, and the lender, having received notice of this, has exercised his right to replace the insurance and bill you for the cost. Well, this is just a guess, suggested by your facts.

Another possibility is that you sent a payment that was too small, perhaps leaving out a prior month's late fee, or failing to take into account an increase in the interest rate. If so, the lender may have refused to accept the payment - lenders don't have to accept part payments and they usually will not do so.

A residential borrower in default can reinstate and stop the foreclosure process almost up to the last minute by paying enough to cure the default and the expenses of beginning the foreclosure, and if you have the funds and don't want to lose the property, this is what you must do. However, you will have a tough time curing the default if your communications with the lender are so bad that you can't even figure out what went wrong (in the lender's view, at least) and how much you supposedly owe.

Your starting point should be to assemble all your records, so you can show what you paid, or tendered, and when, and why that was the right amount. Then arrange a meeting with the private lender and compare your story with the lender's. Ask for a full explanation and a written statement of the amount required to cure the alleged default.

If you aren't satisfied with the result of such a negotiation, or the lender is uncooperative, then you should retain a lawyer.